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Intercoastal Vs. Ocean View

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MARY JORDAN

Freshman Member
Joined
Mar 13, 2003
I am appraising a Condo that is Ocean front, however has an Innercoastal view. What would be the average adjustment amount for the differences? Most of my comps are Ocean view. Also, what would be the average adjustment vs. floors. This is a high rise building.

I would like to read everyone's opinion vs. my supervisor.

Thank You. :D
 

Chris Colston

Elite Member
Joined
Jul 24, 2003
Professional Status
Certified Residential Appraiser
State
Florida
I don't know and I used to do condo appraisals where you are. Now I do them along the Space Coast.

The absolute answer is "it depends". It depends on what the market shows you it should be. Floor adjustments can range from as low as $1,000 to upwards of $5,000 and even $10,000. Same for view.

Can you see any differences in the sales above or below the subject unit?? Perferably these are in the same stack and have been equally updated. If you can't determine the adjustment from the current sales in the subject's project go backwards in time. Usually those types of adjustments stay relatively the same, percentage wise.

If all of the sales have the same view of the Intracoastal, there probably is no adjustment, only the floor adjustment. Remember not to double dip. The market may determine it to be a floor adjustment when in fact it contains a view adjusment, ie the higher the floor the better the view. But also the higher the floor the longer you have to carry the groceries, etc. If its an age restricted project the higher floors can sometimes be a detriment. If its an unsecured project with first floor units that open to the parking lot, the higher floors are more secure, but the lower floors are closer to the parking.

So you can see there is no "average" adjustment. YOU as the appraiser must use the data available in the market to determine the adjustment. :eek:
 

Don Clark

Elite Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
B) Maybe none. I do not know your market. However, the solution should be rather simple.

Find comps, no matter how old, and after adjusting for things you normally would adjust for(sq ft, amenities, etc) what is the difference in the remaining value between the comparables? That is called paired sales analysis. If no current comparables then look for comparables that are 1-2 years old. Do the above. I might also add that if the comparables are in a different neighborhood or condo, etc, you may need to adjust for location using the same criteria. As to floor number. Pick any sale in the past 1-5 years from the same condo that is on your subject floor that is the same size, same amenities, and same year of sale. Then select sales from that same time period that were on different floors but were same or similar to subject and sales on subject floor. Is there any difference in sales price? If so, that may be the amount you would want to consider as an adjustment.

I might recommend a great course for you. It is "Residential Case Study" offered by the AI. It is a week long and would more than satisfy CE requirements for 2 years except for the USPAP update. I did take the course after being in the business 10 years in 1994. A great course, and no, I am not a member of the AI. I just know a good course when I attend one.
 

Walter Kirk

Senior Member
Joined
Jun 24, 2003
Professional Status
Licensed Appraiser
State
New Jersey
Mary,
From your post it seems that you think that there are standard adjustments, there are none. You must establish the adjustments using paired sales analysis. After you are done with the analysis of this building don't think that you can use the same adjustments in other buildings, that may not be the case. This is what we get paid to do.
 

MARY JORDAN

Freshman Member
Joined
Mar 13, 2003
Walter,
Thank you for responding to my post. However, to answer your question I do not think there is a standard adjustment, however the difference between intercoastal and ocean view should bear how much weight? My problem is this is a new building next to a 5 star hotel, but the surronding condos are older and are not in as good condition as my subject. So being there are no comps with intercoastal views in my subject building do I go outside the building just to find view? Or do I adjust based on view and stay within my subject building?

I'm in S.E. Florida.

Thanks to all who have contributed.
Mary
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Mary:

Another fast check, inaddition to going back a couple years in your subject building: Any coastl/innercoastal paired sales in the lesser condition buildings?
 

Chris Colston

Elite Member
Joined
Jul 24, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Originally posted by MARY JORDAN@Aug 24 2003, 05:42 PM
My problem is this is a new building next to a 5 star hotel, but the surrounding condos are older and are not in as good condition as my subject.
So, what you are saying is that the subject is the first sale in the building with an Intracoastal view?? Usually the ocean view is superior because you do not have to look out over the skyline or streets to watch the yachts and speed boats.

That being said, are there any other pending contracts in the building with Intracoastal views that you can compare to like sized like floors of closed units with ocean views?

Can you find out if the developer charged a premium for the ocean view units?

You might have to use one or two of those units from the older projects just to support your view adjusment. Choose one from the older project that has an ocean view and one that has an Intracoastal view. Hopefully on the same floor in the same older project that are the same size as each other, use these as your 4th and 5th Comp (or 3rd and 4th)

Every thing you do needs to be documented so if the underwriter or a reviewer looks at the finished product they can come to same conclusion you did. Keep plugging at it, you'll get there. The ocean vs the Intracoastal is a complex issue that even some of the seasoned appraisers don't get right. B)
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Since you don't have sales to use in a pairs analysis for your adjustment in your building....go to other buildings and examine those sales. See if you can determine a percentage adjustment between ocean view and intercoastal canal views....then apply it to your building. It isn't perfect but it should give you an idea and something to hang your hat on.

Go back as far as necessary to prove up your adjustment. Could even be in another neighborhood or even another city.
 

Dale Smalley

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Florida
From the info you provided it sounds like half of the building faces the ocean and the other half faces the intercoastal waterway. The simple solution is to stick to units with the same view as being most comparable.

Pairs are not as simple as one side vs the other because we often have height adjustments as well in many of the high rises. So you need to calculate both. Run the "pairs" and prove it to yourself. In the new buildings the developer has different prices for floor height and views use that as a starting point. Forget the old buildings they will offer no help.
 

Chris Colston

Elite Member
Joined
Jul 24, 2003
Professional Status
Certified Residential Appraiser
State
Florida
So what was the final outcome? Did you complete the appraisal to your supervisor's satisfaction? :question:
 
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